Commercial Vehicle Insurance Transfer Process
There can be many reasons for you to sell your old commercial vehicle which may range from replacing an old with new to trimming down the number of vehicles used in your business. Whatever be the reason, the thing that you must remember while selling out or transferring the ownership of your old vehicle to someone is the transfer of the commercial vehicle insurance policy. However, if you want to know the process to transfer commercial vehicle insurance, do not worry, here we are discussing the same, but before that let us understand some common things related to commercial vehicle insurance policy transfer:Read more
What is the meaning of Commercial Vehicle Insurance Policy Transfer?
Commercial vehicle insurance is associated with the vehicle, not the vehicle owner. Therefore, when you sell your commercial vehicle, the insurance of this vehicle has to be transferred to the new vehicle owner.
Commercial vehicle insurance transfer is the process wherein the existing vehicle insurance policy is transferred to the new owner of the commercial vehicle. As per section 157, it is necessary for both the parties that are involved in the transfer process of the commercial vehicle to transfer the vehicle insurance within 14 days of the date of sale of the commercial vehicle.
Commercial Vehicle Insurance Policy Transfer Process
When you sell your commercial vehicle, there are two important aspects – one is the transfer of ownership of the vehicle and the second is the transfer of insurance policy. Transferring the ownership is easy, but vehicle insurance policy transfer may confuse you and the reason for the same is the technicalities involved in the insurance policy transfer process. However, transferring a commercial vehicle insurance policy is necessary as the buyer can face legal issues in case of an accident by the vehicle. So, mentioned below is the step-by-step guide to transfer a commercial vehicle insurance policy when selling your used commercial vehicle.
Step 1 – Inform the Insurance Provider and Get the Certificate of No Claim Bonus:
The first step is to inform the insurance provider. As an owner of your commercial vehicle, you must inform your insurance provider about your intention of selling your vehicle and its ownership transfer. After successful transfer of ownership of the vehicle, the insurance provider can help you to transfer the insurance as well. Moreover, if you have a 'No Claim Bonus', you can retain it even though you are selling your vehicle. For doing the same, you must ask your insurance provider to issue you the certificate of NCB retention. This certificate will let you retain your NCB and use it with the new insurance policy for your new commercial vehicle.
Step 2 – Insurance Policy Transfer:
After availing of the certificate of NCB retention, it is time to get the insurance policy transfer. For transferring the commercial vehicle insurance policy, you are required to provide the below-mentioned documents to the insurance provider. The list of these documents is given below:
- The documents of the policy
- The updated and changed Registration Certificate (RC) has the name of the new commercial vehicle owner. If the RC book is not updated yet, you must submit Form 29.
- No Objection Certificate from the seller that is you.
- New policy application form
- Inspection report of the commercial vehicle. This inspection is conducted by the insurance provider.
- The difference between the actual premium of the insurance policy and after deducting the NCB.
In this way, you will be able to get your commercial vehicle insurance policy transferred to its new buyer.
Why Is Commercial Vehicle Insurance Policy Transfer Important?
Transferring a car insurance policy is necessary to avail the advantages of the claim and therefore as a commercial vehicle owner, you must have an insurance policy in place. For example, Mr. A purchases a commercial vehicle from Mr. B but delays the process of transferring the insurance policy. During this period, the commercial vehicle purchased by Mr. A meets with an accident and it is very badly damaged. But, Mr. A would not be able to claim the insurance as the process of transferring the commercial vehicle insurance policy was not completed.
Key Points to Consider While Transferring the Commercial Vehicle Insurance Policy
While you are transferring the commercial vehicle insurance policy, you must remember these points:
- According to the Motor Vehicle Act, the buyer of the commercial vehicle is mandated by law to get the commercial vehicle insurance policy transferred to his/her name.
- The policy transfer process should be done within 14 days of selling the commercial vehicle.
- During these 14 days, when the transfer of commercial vehicle insurance policy is in process, the cover of third-party would automatically be provided in the name of the vehicle buyer. However, if you fail to perform the transfer process within these 14 days, there would not be any third-party cover given to the new owner of the vehicle.
- If there is an insurance claim during this tenure, it will not be rejected as the transfer of the insurance policy is in process. It would be paid soon after the proof of insurance transfer is given by the insurance provider.
Summing it Up!
These are the steps of transferring a commercial vehicle insurance policy to its new owner. However, keep the key points in mind so that the new owner if in a case needs an insurance claim during the policy transfer period can get it without any trouble. So, try and get the commercial vehicle insurance policy transfer within the mentioned time so that there is no hassle in near future.
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